Reliance Could Add As Much As ₹8.34 Lakh Cr To MCap, Says Morgan Stanley

Reliance Industries is expected to see a market cap addition of $60 billion-100 billion (around ₹5 lakh crore to ₹8.34 lakh crore) according to Morgan Stanley. 

What Happened: Morgan Stanley maintained its "overweight" call and increased the target price to ₹3,540. It expects the company's investments in new energy, its retail expansion and its efforts to repurpose its existing energy business would help the company provide earnings growth beyond the next three years if the return on capital employed is above 10%. 

The brokerage expects a 12% compound annual growth rate in earnings per share (EPS) over FY24-27 with multiple triggers across different verticals.

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The research firm expects the company's return on equity to be be higher than the cost of capital in the future as it transitions to a more profitable and less cyclical growth model. 

Morgan Stanley has raised the multiples for the sum of its parts valuation to reflect the change in monetisation as the company catches up with the domestic and global peers, which have seen a business upcycle and monetisation re-rate multiples by 30% in the past year, the brokerage added.

Morgan Stanley raised the EPS estimate for 2025 fractionally by 7% for 2026 and 8% for 2027, factoring in the recent tariff hikes, oil prices and refining margins. 

Jefferies also sees a near 17% upside for Reliance after the company announced tariff hikes on June 27. 

Price Action: Shares of Reliance fell 0.30% to ₹3,121.55 on Monday afternoon.

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